FX.co ★ Day 12 of Russia-Ukraine military conflict

Notably, any military conflict is extremely dangerous to the global economy. Even if the fighting takes place in the Middle East with too little infrastructure and where the economy is stimulated by hydrocarbon exports, food and drug imports, it still affects the global economy. Firstly, capital begins to flow from risky assets to more secure alternatives, from countries where military actions occur to peaceful states, etc. Secondly, stocks of companies related to the regions of military operations start to fall. For example, US aircraft manufacturer Boeing suspended cooperation with Russia and halted technical support to Russian airlines. All aircraft owners, lessors, and insurers left the Russian market. Moreover, this situation affected Boeing stock. Shares of this company have fallen by $20, from $200 to $180 since February 24. It is common that this drop can not be compared with the decline of stocks of Sberbank or any Russian company hit hard by Western sanctions. However, this example perfectly illustrates that all global issues in the 21st century are interconnected. Boeing left the Russian market, as well as lost some new orders for planes. Moreover, the company reduced some income as it refused to supply spare parts to planes and halted software sales and maintenance service to Russian airlines. Therefore, it is evident that the shares of Boeing also fell. However, the company is not directly connected to Ukraine's crisis.

At the same time, the twelfth day of the Russia-Ukraine military conflict has begun. The third round of talks between Kiev and Moscow is due to take place today. However, a positive outcome is unlikely. Ukraine has already stated that it is open to discuss not joining NATO. Moreover, Ukraine's NATO membership is not possible within the next 5-10 years. However, Ukraine demands security guarantees from Russia and the West. Russia is not willing to provide these guarantees and insists on "demilitarization" of Ukraine. It means that Ukraine must capitulate and lay down arms. It is clear that currently this option is impossible. Moreover, a ceasefire in the near future and a cessation of hostilities are also unlikely. Consequently, the world is facing the first stage of a new crisis that could drag on for many months. Besides, the global economy will be severely affected by it.